USD/JPY failed to hold to gains and dropped toward daily lows. During the last hours it has been consolidating around 103.85, the same level it closed yesterday.
The pair peaked at 104.19 after the beginning of the American session but then lost strength as US equity prices moved off highs and also amid a decline in US bond yields. USD/JPY dropped back under 104.00 and found support slightly above daily lows.
The Japanese currency has been the best performer during the last hours of the day on a session where the Aussie and the Kiwi outperformed. In Wall Street, the Dow Jones was rising 0.47% at 18,170 after starting the session above 18,200.
US economic data had little impact on the market. The CPI index rose 1.5% during the last 12 months in September, matching initial forecasts. Tomorrow in the US, housing data and the Beige Book will be released. Earlier during the Asian session, Chinese economic data could have an impact on the forex market.
On a wider perspective, the pair continues to move sideways, around 103.90 still holding a bullish bias (easing) with the rally limited so far by 104.30 – 104.60. In the short-term support could be located at 103.65/70 (daily low), 103.30 (Oct 13 low) and 103.00 (psychological). On the opposite direction, resistance might lie at 104.20 (daily high), 104.45/50 (Oct 12, 14 high) and 104.65 (Cot 13 high).